Gig economy and Uber drivers

Legal Review with Charles Lucas & Marshall, part of Coffin Mew

Thu, 14 Dec 2017

Andrew Egan of Charles Lucas & Marshall

IN a recent high-profile case on employment status, the Employment Appeals Tribunal (EAT) has recently confirmed that Uber drivers should be classified as ‘workers’ who are entitled to basic employment rights.

Uber drivers, whose contracts of employment were designed to make them appear to be self-employed, originally successfully argued in an Employment Tribunal that they were, in fact, workers.

The tribunal in ‘Aslam and others v Uber BV and others’ held that the drivers were entitled to be paid the national minimum wage and to receive paid annual leave, among other things.

The EAT, subsequently following an appeal by Uber, took the view that Uber’s drivers bore the characteristics of being 'workers’. New drivers were ‘interviewed’ and successful applicants went through an induction process.

Drivers could be dropped if their approval ratings fell or if they committed serious misconduct.

Uber drivers could also choose when they worked, but were required to undertake to provide the work personally for Uber.

This is one of the characteristics for determining employment status.

The nature of businesses like Uber is the flexibility which they offer to the business and, in this case, the drivers, but the courts take the view that such employment practices should be regulated and the rights of workers not ignored.

Uber is now likely to appeal the EAT decision.

Another similar case, ‘Pimlico Plumbers Ltd and another v Smith’, is due to be heard in the Supreme Court in 2018.

In that case, the Court of Appeal had found that a plumber, described in his contract as a “self-employed operative”, was entitled to worker rights.

There have been an increasing number of cases where tribunals have concluded that individuals were workers and not independent contractors, typically in cases where organisations might try to deprive workers of the minimum wage and holiday pay.

The rights which workers have include protection from unlawful deductions from wages, the entitlement to receive the national minimum wage, and an entitlement to paid annual leave, which rights are not available for a self-employed person.

The Work and Pensions Committee and Business, Energy and Industrial Strategy (BEIS) Committee have very recently produced a draft Bill designed to tackle the perceived exploitation of 'gig economy' workers.

If the Bill is passed into legislation, it would assume a 'worker by default' status, meaning employers would have to offer basic rights such as sick pay and holiday pay to such workers.

In the meantime, the message from the recent case law is that an individual’s employment status is not always exactly what the parties think or intend it to be.

Contractual documentation stating that an individual is self-employed will not alone avoid the risk of a possible tribunal claim that an individual worker has worker status.

Those working in HR and company management must, therefore, be alert to this issue and will need to carefully define and structure working relationships properly from the beginning.

At Coffin Mew, we can help advise in relation to such issues and help you by providing the necessary documentation or review your existing documentation, so that you do not fall foul of such potential claims relating to worker and employment status issues.

Andrew Egan is a senior associate solicitor in the employment team at Charles Lucas & Marshall, part of Coffin Mew, and can be contacted on 01635 917496 or andrewegan@coffinmew.co.uk